MALABU: Italian court rejects Nigeria’s $1.1 billion compensation demand

An appeals court in Milan, Italy, on Friday rejected Nigeria’s $1.1 billion compensation request against Italian energy group Eni and British oil and gas company Shell in civil proceedings relating to the controversial Malabu oil deal.

Reuters reports that the court decision was read out on Friday.

“We are pleased that these civil proceedings have been dismissed,” Shell said in an emailed comment to Reuters.

“This follows the Milan criminal tribunal’s finding that there was no case to answer for Shell or its former employees when they were fully acquitted in 2021, a decision that was upheld in July 2022, when criminal proceedings ended.”

In June, PREMIUM TIMES reported how Nigeria lost its $1.7 billion claim against JP Morgan Chase Bank over the transfer of proceeds from the sale of OPL 245 in the controversial Malabu oil deal.

Judge Sara Cockerill ruled that the Nigerian government couldn’t show that it had been defrauded in the case.

In the suit, Nigeria is claiming more than $1.7 billion for the bank’s role in the controversial deal. Nigeria also alleges that JP Morgan was “grossly negligent” in its decision to transfer funds paid by oil giants Shell and Eni into an escrow account controlled by a former Nigerian oil minister, Dan Etete.

Earlier in February, Nigerian lawyer, Roger Masefield, had argued that the nation’s case rested on proving that there was fraud and JP Morgan was aware of the risk of fraud.

“The evidence of fraud is little short of overwhelming,” the lawyer told the court.

“Under its Quincecare duty, the bank was entitled to refuse to pay for as long as it had reasonable grounds for believing its customer was being defrauded.”

Quincecare refers to a legal precedent whereby the bank should not pay out if it believes its client will be defrauded by making the payment.

On Friday, the Nigerian government again lost its civil claims.

The OPL deal details how Shell and Italy’s Eni in 2011 paid the Nigerian government of then president Goodluck Jonathan a combined $1.3 billion for an oil block. Of that amount $875 million was paid to Malabu Oil & Gas, a company controlled by former oil minister Dan Etete.

Mr Etete had awarded Malabu the rights to the block in 1998 when he was Nigeria’s oil minister.

Within weeks of the deal in April 2011, half of Malabu’s money was allegedly packed into bags and paid out to Nigerian government officials and Western oil executives as cash bribes.

The deal has also spawned further lawsuits, including efforts by the Buhari government to recover assets.

In March 2021, a panel of judges in Milan acquitted Eni, Shell and executives, who all denied any wrongdoing, of bribery.

On Friday, the Milan appeals court said it would make reasons for the new verdict public within 90 days.